Education economics. A guide through the subject

The key messages from this topic guide are:

  • Education economics starts from the basis that there are returns to education that increase the wealth and well-being of the educated.
  • Economists view education as a merit good, in that there are externalities or spillovers, meaning returns to education benefit others beyond the person being educated.
  • Government/public sector intervention in education can be justified by these spillovers, as well as by market failures in capital markets and/or in the provision of information, which mean the market alone would provide insufficient education.
  • In addition, there is a view of education as a ‘right’, which means it should be provided regardless of cost–benefit ratios.

The guide is organised into the following sections:

  • Education, skills and growth
  • The returns to education
  • Education systems in developing nations
  • Education policy, interventions, evidence
  • Aid, finance and education

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